Harvey Norman chairman Gerry Harvey has tipped his hat to his staff, crediting them with playing a substantial role in the company’s much-improved financial performance post-GFC.
Last week, Gerry Harvey sat down for a 21 minute interview with Business Spectator journalists Alan Kohler, Robert Gottliebsen and Stephen Bartholomeusz.
When asked about bigger margins the company is enjoying, Harvey replied, “I’d like to think it’s because we’re doing a better job in the store in terms of the merchandising, in terms of the quality of people that we employ, the time we spend with our people.”
One particular young Harvey Norman employee was singled out for praise by the boss:
Like the other day, one of our stores had just suddenly gone from $100,000 profit to $500,000 profit in a fairly short period of time, so I rang this bloke and I said ‘Who are you? I’ve never heard of you. You’ve just done this fantastic job’. And he told me who he’d worked for, some of our best people, and I said to him you’d better come up and see me pretty quick or I’m coming down to see you. Do you know how old he was? He was 23. That’s amazing. So our system can let someone through at a very early age and they’re a top performer. Now, that bloke will make $300,000, $400,000 for himself this year, minimum. And he’s a 23-year-old.
Harvey also spoke frankly about online retail (“it’s two to three per cent of our sales”), staff development (“We call it Search for a Star”) and Clive Peeters (“I’d say we lost well over a $100 million on that little exercise”).
Throughout the interview Harvey reasserted his company’s dominance over electrical retailing industry. He had this to say about his competition:
In Australia our biggest opposition in say, electrical, would be the Good Guys. It’s a private company, so we have no idea how they’re travelling. We look at JB Hi-Fi. They’re in a segment that we’re in, in what we call ‘brown goods’. They travel very well. Then you’ve got a company like Dick Smith that disappeared off the map. They’re back trading again now and I wish them luck, but I wouldn’t want any shares in Dick Smith. And, you know, they’re our main opposition there.
You can watch the full interview or read the transcript here.